Marc Faber: Forget the economy, the Fed is ‘market dependent’

The market was somewhat spooked by the minutes from the Federal Reserve's April meeting, which suggested that if the economy continues to improve, the central bank will raise interest rates in June. But Marc Faber has an alternative take on what the central bank is up to.

In the minutes released Wednesday, it was recorded that "Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen, and inflation making progress toward the Committee's 2 percent objective, then it likely would be appropriate for the Committee to increase the target range for the federal funds rate in June."

While Fed officials frequently highlight their data dependency, the minutes surprised market participants who had thought a June hike was out of the question, and the release consequently led to a dip in stocks and a rise in yields on Wednesday afternoon.

Yet Faber, the editor of the Gloom, Boom & Doom Report, questions the Fed's stated reliance on economic data. In fact, to him, gauging the market's reaction to the potential for a June hike was part of the point of the release.

The Fed "said a rate hike is on the table so they can watch the market reaction," Faber said Wednesday on CNBC's "Trading Nation."

"If we are, in June, 10 to 20 percent lower in stocks and bond yields are up, they're not going to move. If, on the other hand, the market is relatively stable and moves up from here, maybe not to new highs but above 2,000 on the S&P, they will probably move," he said, referring to a level that was actually 48 points below Wednesday's closing price. "They're very much market dependent in my opinion."

Read More Fed rate hike will juice economy, stocks: Jim Paulsen

Not that the investor known as "Dr. Doom" gives any credence to the standard datapoints upon which economists and investors typically rely.

"My sense is that the economy is, in some sectors, hardly growing," Faber said. "The retail sales figures are very suspicious and the employment figures are also suspicious. The difficulty is, can you trust the published data, whether that is in the U.S., in Europe or in China?"

Read MoreThe case for a July interest rate hike

Asked to answer his own question, Faber responded: "Of course I don't."

Of course, for those who disbelieve economic data releases, depending on the markets to tell all may be the only real option remaining.

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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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